Friday’s paper contained a pro and con opinions in regard to new federal regulations on credit card fees. My top favorite is the conservative Heritage Foundation position that the settlement will permanently harm the consumer. Yes, it’s supposed to be an antitrust settlement to force credit card issuers, usually major banks, to cease the fees of 2 percent charged every time a user of Visa or Mastercard swipes a card.
This doesn’t mention the different charges our lively banks have thought to add, from going over the credit limit to having a lovely time with the U.S. traveler to foreign countries, including Canada. Last year I was startled to see, for the first time in my 30 years of annual overseas travel, 24 “foreign transfer fees” leveled. What was that about? Annoyed by this, I then checked the conversion figures used.
There were small amounts added; not enough to make the average traveler go to the currency tables; i.e., my hotel bill in France was $199.00, changed from Euros. The current conversion rate showed $194.00. Some gifts from Iceland? $25.00 from Krona. Actual charge? $23. How about various purchases and hotels in London? All around $2 padding each. And that was £ sterling. Three different currencies in a one-month period, and all in favor of the credit card company. How much money do they make a year from that?
The Heritage writer didn’t get into foreign purchases, but stated the $8 billion in reduced retailer fees were not passed on to customers. This retailer saw no savings until I moved to a small firm that charges less.
Australia, the Heritage man warns, faced lower interchange fees, but credit card fees increased 22 percent.
Over here, we face a terrible fate. Banks will cease offering free checking (how many do now? Names, please). Customers will shift to banks that don’t issue credit cards so have lower fees. But other banks will not offer credit cards, especially the endangered small banks. So we will all suffer. Our wonderful credit system will be “jeopardized by ill-conceived price controls” he concludes. Makes you want to cry for the banks, doesn’t it?
So, thanks for providing some amusement on a cold autumn day.